O-LevelAccountingPreparation of financial statementsOct/Nov 2022Paper 1 Q191 Mark
During the year, Sam paid advertising expenses, some of which related to the following financial year. Sam made an adjustment for this when preparing his financial statements for the current year. What was the effect on Sam's financial statements of making this adjustment? decrease profit for the year increase profit for the year increase current assets increase current liabilities A ✓ B ✓ ✓ C ✓ D ✓
Aincrease profit for the year
Bincrease profit for the year, increase current assets
Cdecrease profit for the year
Dincrease current liabilities
✓ Correct Answer
The correct answer is B: increase profit for the year, increase current assets
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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